The Pakistani Rupee (PKR) depreciated against the US Dollar (USD) and posted losses in the interbank market today. It lost 90 paisas against the greenback at the close of the session today.
It depreciated by 0.48 percent against the USD and closed at Rs. 187.52 as compared to the last closing of Rs. 186.62 in the interbank market last week.
— SBP (@StateBank_Pak) May 9, 2022
The Rupee closed in the red against the dollar during the start of the new week. Today’s losses are a result of the local exchange unit’s continued struggle against various factors threatening to impede fiscal progress.
Earlier in the day, discussing the rupee’s near-term outlook, the former Treasury Head of Chase Manhattan Bank, Asad Rizvi, noted on Twitter,
“Widening of Trade Deficit to $ 39.26 billion in 10-months of the current FY is caused by record-high imports that have surged to $ 65.49 billion versus $ 44.73 billion is not good news because OIL prices are not easing. While drying up of remittances this week could delay rupee recovery.”
INTER BANK MKT
Widening of T/Deficit to $ 39.26bn in 10-months of the current FY is caused by record high imports that has surged to $ 65.49bn versus $ 44.73bn is not good news because OIL prices is not easing.
While drying up of remittances this week could delay #PKR recovery.
— Asad Rizvi (@asadcmka) May 9, 2022
While the remittances, through the Roshan Digital Accounts (RDAs), for April have offered encouragement – as $245 million was recorded in April 2022 – the inflows have completely dried out after the holidays.
The noteworthy inflows of remittances through RDA were reported due to the month of Ramadan, in which overseas Pakistanis usually remit relatively higher amounts to their relatives for Eid celebrations and the religious obligation of Zakat and Fitra.
The depletion of foreign reserves and delay in the resumption of the International Monetary Funds program (IMF) are hurting the Rupee badly. The government has also failed in receiving any funding from Saudi Arabia, UAE, and China, exasperating the depleting reserves crisis.